News / USA

US Postal Service Faces Financial Disaster

US Postal Service mailboxes are seen awaiting disposal September 1, 2011, in San Jose, California.
US Postal Service mailboxes are seen awaiting disposal September 1, 2011, in San Jose, California.
Elizabeth Lee

The United States Postal Service is in big financial trouble.   In the last ten years the agency has lost 50 percent of its mail volume. Billions of dollars have been lost and the trend is expected to continue.  By the end of September, the Postal Service will no longer be able to pay retiree health benefits.  The head of the postal service went before a Senate committee this week to ask lawmakers to allow the postal services to make some drastic changes.

There are more post offices in the United States than McDonalds, Starbucks and Walmart combined.  The Postal Service is also written into the U.S. Constitution.  For Lenroy Lee, the small North Long Beach post office just outside of Los Angeles is a vital part of his community.

"I know some of the employees in there. I see them a lot," said Lee.

But the North Long Beach post office, may soon close because it costs more to keep this building open than the revenue it generates.  In fact 15,000 post offices in similar financial situations across the United States will be reviewed and face possible closure within the next four years.

"It’s a bad thing," Lee added.  "It’s a local post office. We need something small in the community. A lot of people can’t get around to the bigger ones."

But a spokesman for the U.S. Postal Service, Richard Maher, says people have changed the way they communicate and do business.

"Instead of the mail they use the Internet. They receive and pay their bills online," Maher explained.  

Last year alone, the Postal Service lost $8.5 billion.  The agency projects another $10 billion in losses this year.  

"If the postal service was a regular business we would have already filed for bankruptcy and went through restructuring and reorganization," added Maher.

But because the postal service is a government agency, U.S. Congress has to approve many of the money saving changes proposed by Postmaster General Patrick Donahoe.  Before a Senate committee hearing recently, he requested permission to change the way the agency handles employee health benefits and pension plans.   Donahoe also asked to end Saturday mail deliveries.

"And by delivering five days a week to businesses and residents we feel we could save over three billion dollars annually," Maher explained.

In order to save the post office, Donahoe says the agency also needs to eliminate up to 220,000 jobs by 2015.  

This mail carrier has been with the postal service for 24 years.  She had thought it would give her financial security.

"When I first got it I was in my late 20s and I said 'Oh this is perfect. It allows us to buy a home, save money to do this and [send] the kids to college and so forth.' And now, because the way the economy is going and being pushed and changing things in the post office, I am going to retire early," she noted.

Even if Congress approves the changes, spokesman Richard Maher says the main mission of the Postal Service will remain the same.

"And we deliver to every business and every resident in the United States, but we will change and we have to change," said Maher.

Maher adds that many of the changes will be put in place as soon as Congress gives its approval.

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